How Did Lawyers Enable the Meltdown?

In the game of blame that followed the deepest financial implosion since the Great De­pression, bankers and money managers have borne their share of attention. But how much blame should lawyers bear? Plenty.

As legislators, they helped remove restrictions on commercial banks that allowed them to get involved with subprime mortgage-backed securities.

As regulators, they allowed leverage at investment banks to increase largely unchecked. As judges, they made it harder for shareholders to bring suits to stop the financial shenanigans.

As counsel, their legal opinions gave sanction to deals that, in the words of the analysts behind them, “could have been structured by cows.”

There were also lawyers who did their jobs, only to find their voices lost in torrents of money, rationalization or plainspoken hostility toward the rule of regulation.

Continue reading this article in the January ABA Journal.